Under what circumstances will Bonchon reimburse a franchisee for costs associated with appearing at a venue to testify on Franchisor's behalf regarding employment allegations?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Finally, should it ever be asserted that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees in any private or government investigation, action, proceeding, arbitration or other setting, Franchisee irrevocably agrees to assist Franchisor in defending said allegation, including (if necessary) appearing at any venue requested by Franchisor to testify on Franchisor's behalf (and, as may be necessary, submitting itself to depositions, other appearances and/or preparing affidavits dismissive of any allegation that Franchisor is the employer, joint employer or co-employer of any of Franchisee's employees). To the extent Franchisor is the only named party in any such investigation, action, proceeding, arbitration or other setting to the exclusion of Franchisee, then should any such appearance by Franchisee be required or requested by Franchisor will recompense Franchisee the reasonable costs associated with Franchisee appearing at any such venue (including travel, lodging, meals and per diem salary).
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, a franchisee may be reimbursed for reasonable costs associated with appearing at a venue to testify on Bonchon's behalf in certain employment-related legal matters. This reimbursement is contingent upon specific conditions being met. Bonchon will only cover these costs if it is the only named party in an investigation, action, proceeding, arbitration, or other setting, excluding the franchisee.
If Bonchon is the only party named in such a legal matter, and Bonchon requires or requests the franchisee's appearance, Bonchon will recompense the franchisee for reasonable costs. These costs include travel, lodging, meals, and a per diem salary for the franchisee's time. This suggests that Bonchon acknowledges the franchisee's time and expenses are valuable and should be covered when the franchisee is assisting Bonchon in a legal defense where the franchisee is not a named party.
However, the franchisee irrevocably agrees to assist Bonchon in defending any allegation that Bonchon is the employer, joint employer, or co-employer of the franchisee or the franchisee's employees. This assistance includes appearing at any venue requested by Bonchon to testify on Bonchon's behalf and submitting to depositions or preparing affidavits. The FDD stipulates that the franchisee is the sole and exclusive employer of its employees, responsible for all employment-related decisions and liabilities. This arrangement is typical in franchising, where franchisees are generally independent business owners.